RingCentral Announces Fourth Quarter and Fiscal Year 2025 Results

BELMONT, Calif.--( BUSINESS WIRE)-- RingCentral, Inc. (NYSE:RNG), a global leader in AI-powered business communications, today announced financial results for the fourth quarter and fiscal year ended December 31, 2025.

Fourth Quarter Financial Highlights

“We delivered a solid fourth quarter that capped a strong year of execution, highlighted by record free cash flow and FCF per share. AI is proving to be a strong tailwind, with ARR from customers who utilize at least one of our monetized AI products more than doubling year over year and now approaching 10% of our overall ARR,” said Vlad Shmunis, founder and CEO of RingCentral. “We’re leveraging a scaled, cloud-native, real-time communications global platform, and are investing over $250 million in innovation annually. We’re confident in the future of our business, and are excited to initiate our first ever dividend while increasing our share repurchase authorization to $500 million.”

RingCentral Initiates a Dividend

RingCentral’s Board of Directors approved the initiation of a cash dividend program and declared a quarterly cash dividend of $0.075 per share of our outstanding capital stock, payable on March 16, 2026 to stockholders of record as of the close of business on March 9, 2026. The Company intends to pay a cash dividend on a quarterly basis going forward, subject to market conditions and approval by our Board of Directors.

“Our 2025 results reflect disciplined execution across growth, profitability, and capital allocation. We expanded GAAP operating margin to 4.8% and non-GAAP operating margin to 22.5%, generated $530 million in free cash flow, achieved GAAP operating profitability, reduced stock-based compensation meaningfully, and lowered net leverage to 1.7x,” said Vaibhav Agarwal, Chief Financial Officer of RingCentral. “As we enter 2026, we remain committed to investing in durable growth anchored in ongoing world-class innovation, improving GAAP and non-GAAP profitability and free cash flow. We are targeting 20% GAAP operating margins over the next three to four years while further reducing stock-based compensation to drive EPS and free cash flow per share growth. We are also committed to deleveraging with an eye toward achieving an investment-grade profile in the near-term, while returning additional capital through dividends and share repurchases.”

Financial Results for the Fourth Quarter 2025

Financial Results for the Full Year 2025

Additional Highlights

Financial Outlook

First Quarter 2026 Guidance:

Full Year 2026 Guidance:

Conference Call Details:

Investor Presentation Details

An investor presentation providing additional information and analysis can be found at https://ir.ringcentral.com.

About RingCentral

RingCentral is a global leader in agentic voice AI–powered cloud business communications, delivering an integrated platform for business phone, SMS, contact center, workforce engagement management, video collaboration, and messaging. Powered by advanced AI capabilities, RingCentral AI receptionist, virtual assistant, and conversation intelligence address every phase of the conversation journey — before, during, and after each human interaction. With RingCentral, businesses can work smarter, respond faster, and connect more meaningfully with their customers. Visit ringcentral.com to learn more.

Forward-Looking Statements

This press release contains “forward-looking statements,” including but not limited to, statements regarding our future financial results, our GAAP and non-GAAP guidance, the results of the pace of our innovation, our plans for capital allocation, including our share repurchase authorization, future quarterly dividends and investment in research and development, our expectations around the contribution of our new products, and our expectations around the demand for our products. Forward-looking statements are subject to known and unknown risks and uncertainties, and are based on assumptions that may prove to be incorrect, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are: our ability to attract new customers and grow at our expected rate of growth; our ability to add and retain larger and enterprise customers and enter new geographies and markets; our ability to develop and continue to release, and gain customer acceptance of, new and improved versions of our services; our ability to compete successfully against existing and new competitors; our ability to enter into and maintain relationships with channel partners and strategic partners; our ability to realize the anticipated benefits of our strategic relationships; our ability to successfully and timely integrate, and realize the benefits of any significant acquisition we may make; our ability to manage our expenses and growth; and general market, political, economic, and business conditions, as well as those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, and in other filings we make with the Securities and Exchange Commission from time to time.

All forward-looking statements in this press release are based on information available to RingCentral as of the date hereof, and we undertake no obligation to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.

Non-GAAP Financial Measures

Our reported financial results and financial outlook include certain Non-GAAP financial measures, including Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP income from operations, Non-GAAP operating margin, Non-GAAP adjusted EBITDA, Non-GAAP net income, Non-GAAP net income per diluted share, Non-GAAP free cash flow and Non-GAAP free cash flow margin.

Non-GAAP subscriptions gross margin is defined as Non-GAAP subscriptions gross profit divided by GAAP subscriptions revenues. Non-GAAP subscriptions gross profit is defined as GAAP subscriptions revenues less Non-GAAP subscriptions cost of revenues. Non-GAAP subscriptions cost of revenues is defined as GAAP subscriptions cost of revenues adjusted for share-based compensation which includes related employer payroll taxes, amortization of acquired intangibles, third-party relocation and other costs and restructuring costs.

Non-GAAP other gross margin is defined as Non-GAAP other gross profit divided by GAAP other revenues. Non-GAAP other gross profit is defined as GAAP other revenues less Non-GAAP other cost of revenues. Non-GAAP other cost of revenues is defined as GAAP other cost of revenues adjusted for share-based compensation which includes related employer payroll taxes, amortization of acquired intangibles and restructuring costs.

Non-GAAP income from operations is defined as GAAP income from operations excluding share-based compensation which includes related employer payroll taxes, amortization of acquired intangibles, asset write-down charges, third-party relocation costs tied to the conflict between Russia and Ukraine and other costs including acquisition-related transaction costs, certain litigation-related costs, change in fair-value of contingent consideration, one-time expenses related to strategic consulting services, other cost-reduction and productivity initiatives, and restructuring costs. Non-GAAP operating margin is defined as Non-GAAP income from operations divided by total GAAP revenue. Non-GAAP adjusted EBITDA is defined as Non-GAAP income from operations excluding depreciation and amortization.

Non-GAAP net income is defined as GAAP net income (loss) excluding share-based compensation which includes related employer payroll taxes, amortization of acquired intangibles, asset write-down charges, third-party relocation costs tied to the conflict between Russia and Ukraine and other costs including acquisition-related transaction costs, certain litigation-related costs, change in fair-value of contingent consideration, net impact of amended agreements with partners, loss (gain) associated with investments, intercompany remeasurement gains or losses, one-time expenses related to strategic consulting services, other cost-reduction and productivity initiatives, restructuring costs, non-cash interest expense associated with amortization of debt discount and loss (gain) on early extinguishment of debt, and the related income tax effect of these adjustments.

Non-GAAP free cash flow is defined as GAAP net cash provided by operating activities adjusted for capital expenditures including purchases of property and equipment and capitalized internal-use software. We believe information regarding Non-GAAP free cash flow provides useful information to investors in understanding and evaluating the strength of liquidity and available cash. Non-GAAP free cash flow margin is defined as Non-GAAP free cash flow divided by total GAAP revenues.

We have included Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income , Non-GAAP net income per diluted share, Non-GAAP free cash flow and Non-GAAP free cash flow margin in this press release because they are key measures used by us to understand and evaluate our operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans. In particular, the exclusion of certain expenses and cash flow items in calculating Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income, Non-GAAP net income per diluted share, Non-GAAP free cash flow, and Non-GAAP free cash flow margin provide useful measure for period-to-period comparisons of our business.

Although Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income, Non-GAAP net income per diluted share, Non-GAAP free cash flow and Non-GAAP free cash flow margin are frequently used by investors in their evaluations of companies, these non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered alongside other financial performance measures.

For a reconciliation of our forecasted non-GAAP operating margin and free cash flow, see “Reconciliation of Forecasted Operating Margin GAAP Measures to Non-GAAP Measures.” We have not reconciled our forecasted non-GAAP EPS to its respective forecasted GAAP measure because we do not provide guidance on it. We do not provide guidance on forecasted GAAP EPS because of the inherent uncertainty and complexity involved in forecasting the intercompany remeasurement gain (loss), gain (loss) associated with investments, gain (loss) on early debt extinguishment, and provision (benefit) from income taxes, which could be significant reconciling items between the non-GAAP and respective GAAP measures. The intercompany remeasurement gain (loss) is affected by the movement in various exchange rates relative to the U.S. Dollar, which is difficult to predict and subject to constant change. We do not provide guidance on gain (loss) associated with investments as it is based on future share prices, which are difficult to predict and subject to inherent uncertainties. We do not provide guidance on gain (loss) on early debt conversions and extinguishments as these are based on future conversion requests, future share prices, and interest rates, which are difficult to predict and are subject to inherent uncertainties. We do not provide guidance on forecasted GAAP tax rates as we do not forecast discrete tax items as they are difficult to predict. We utilized a projected long-term tax rate in our computation of the non-GAAP income tax provision. For fiscal 2026, we have determined the projected non-GAAP tax rate to be 22.5%. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

Reconciliations of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release.

Our reported results also include our annualized exit monthly recurring subscriptions (ARR), as well as Net Monthly Subscriptions Dollar Retention Rate. We define our ARR as our monthly recurring subscriptions (MRR) multiplied by 12. Our MRR equals the monthly value of all customer recurring charges contracted at the end of a given month. We believe this metric is a leading indicator of our anticipated subscriptions revenue. We define our Net Monthly Subscription Dollar Retention Rate as (i) one plus (ii) the quotient of Dollar Net Change divided by Average Monthly Recurring Subscriptions. We calculate dollar net change as the quotient of (i) the difference of our monthly recurring subscriptions at the end of a period minus our monthly recurring subscriptions at the beginning of a period minus our monthly recurring subscriptions at the end of the period from new customers we added during the period, (ii) all divided by the number of months in the period. We define our average monthly recurring subscriptions as the average of the monthly recurring subscriptions at the beginning and end of the measurement period.

TABLE 1

RINGCENTRAL, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

December 31, 2025

December 31, 2024

Assets

Current assets

Cash and cash equivalents

132,564

242,811

Accounts receivable, net

384,100

386,252

Deferred and prepaid sales commission costs

167,304

182,615

Prepaid expenses and other current assets

81,190

59,444

Total current assets

765,158

871,122

Property and equipment, net

186,570

180,650

Operating lease right-of-use assets

30,855

46,463

Deferred and prepaid sales commission costs, non-current

252,504

325,198

Goodwill

97,792

82,986

Acquired intangibles, net

135,410

258,526

Other assets

13,166

14,928

Total assets

1,481,455

1,779,873

Liabilities, Temporary Equity, and Stockholders’ Deficit

Current liabilities

Accounts payable

27,677

21,866

Accrued liabilities

297,633

283,799

Current portion of long-term debt, net

624,216

181,252

Deferred revenue

269,122

261,882

Total current liabilities

1,218,648

748,799

Long-term debt, net

629,580

1,347,881

Operating lease liabilities

14,372

29,733

Other long-term liabilities

7,525

4,930

Total liabilities

1,870,125

2,131,343

Temporary equity

Series A convertible preferred stock

199,449

Stockholders’ deficit

Common stock

Additional paid-in capital

1,123,447

1,215,377

Accumulated other comprehensive income (loss)

2,458

(8,881

)

Accumulated deficit

(1,714,033

)

(1,757,424

)

Total stockholders’ deficit

(588,119

)

(550,919

)

Total liabilities, temporary equity and stockholders’ deficit

1,481,455

1,779,873

TABLE 2

RINGCENTRAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Revenues

Subscriptions

622,218

589,677

2,426,879

2,297,192

Other

21,815

24,835

88,263

103,203

Total revenues

644,033

614,512

2,515,142

2,400,395

Cost of revenues

Subscriptions

158,369

150,673

616,190

593,294

Other

25,138

27,501

107,043

112,213

Total cost of revenues

183,507

178,174

723,233

705,507

Gross profit

460,526

436,338

1,791,909

1,694,888

Operating expenses

Research and development

77,563

84,901

316,993

329,323

Sales and marketing

275,906

277,255

1,095,947

1,096,448

General and administrative

64,616

58,545

258,418

266,447

Total operating expenses

418,085

420,701

1,671,358

1,692,218

Income (loss) from operations

42,441

15,637

120,551

2,670

Other income (expense), net

Interest expense

(13,758

)

(16,327

)

(60,279

)

(64,995

)

Other (expense) income

(796

)

2,280

(4,035

)

15,100

Other (expense) income, net

(14,554

)

(14,047

)

(64,314

)

(49,895

)

Income (loss) before income taxes

27,887

1,590

56,237

(47,225

)

Provision for income taxes

4,920

8,778

12,846

11,063

Net income (loss)

22,967

(7,188

)

43,391

(58,288

)

Net income (loss) per common share

Basic

0.27

(0.08

)

0.48

(0.63

)

Diluted

0.26

(0.08

)

0.48

(0.63

)

Weighted-average number of shares used in computing net income (loss) per share

Basic

86,106

90,678

89,481

92,110

Diluted

87,959

90,678

91,214

92,110

TABLE 3

RINGCENTRAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Year ended December 31,

2025

2024

Cash flows from operating activities

Net income (loss)

43,391

(58,288

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

222,603

222,609

Share-based compensation

269,658

339,059

Asset write-down and other charges

11,440

—

Amortization of deferred and prepaid sales commission costs

163,550

162,552

Amortization of debt discount and issuance costs

4,627

4,272

Loss (gain) on early extinguishment of debt

4,988

—

Reduction of operating lease right-of-use assets

24,800

20,723

Provision for bad debt

17,470

8,667

Other

1,729

(8,428

)

Changes in assets and liabilities:

Accounts receivable

(13,815

)

(30,481

)

Deferred and prepaid sales commission costs

(111,563

)

(130,730

)

Prepaid expenses and other assets

(18,963

)

19,811

Accounts payable

4,100

(29,793

)

Accrued and other liabilities

10,462

(37,433

)

Deferred revenue

6,746

19,592

Operating lease liabilities

(23,796

)

(18,856

)

Net cash provided by operating activities

617,427

483,276

Cash flows from investing activities

Purchases of property and equipment

(30,104

)

(24,994

)

Capitalized internal-use software

(57,110

)

(55,534

)

Cash paid for business combination, net of cash acquired

(20,754

)

(26,291

)

Purchases of intangible assets and long-term investments

—

(2,540

)

Net cash used in investing activities

(107,968

)

(109,359

)

Cash flows from financing activities

Proceeds from issuance of stock in connection with stock plans

14,718

16,693

Payments for taxes related to net share settlement of equity awards

(12,563

)

(5,965

)

Payments for repurchase of common stock, including excise tax

(334,446

)

(322,356

)

Payments for the settlement of convertible notes

(161,326

)

—

Repayments of principal on term loan

(67,750

)

(20,000

)

Repurchases of principal on senior notes

(53,903

)

—

Payments for fees on long-term debt

(7,517

)

(4,851

)

Repayment of financing obligations

(633

)

(4,257

)

Payment for contingent consideration

—

(10,345

)

Net cash used in financing activities

(623,420

)

(351,081

)

Effect of exchange rate changes

3,714

(2,220

)

Net (decrease) increase in cash, cash equivalents, and restricted cash

(110,247

)

20,616

Cash, cash equivalents, and restricted cash

Beginning of year

242,811

222,195

End of year

132,564

242,811

TABLE 4

RINGCENTRAL, INC.

RECONCILIATION OF OPERATING INCOME (LOSS)

GAAP MEASURES TO NON-GAAP MEASURES

(Unaudited, in thousands)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Revenues

Subscriptions

622,218

589,677

2,426,879

2,297,192

Other

21,815

24,835

88,263

103,203

Total revenues

644,033

614,512

2,515,142

2,400,395

Cost of revenues reconciliation

GAAP Subscriptions cost of revenues

158,369

150,673

616,190

593,294

Share-based compensation

(3,129

)

(5,619

)

(14,658

)

(23,647

)

Amortization of acquired intangibles

(31,316

)

(31,307

)

(125,863

)

(130,535

)

Third-party relocation and other costs, net

)

(129

)

(12

)

(178

)

Restructuring costs

(1,923

)

(62

)

(3,416

)

(634

)

Non-GAAP Subscriptions cost of revenues

121,997

113,556

472,241

438,300

GAAP Other cost of revenues

25,138

27,501

107,043

112,213

Share-based compensation

(873

)

(1,796

)

(4,667

)

(7,791

)

Amortization of acquired intangibles

(81

)

(86

)

(332

)

(151

)

Restructuring costs

(47

)

(763

)

(700

)

Non-GAAP Other cost of revenues

24,137

25,667

101,281

103,571

Gross profit and gross margin reconciliation

Non-GAAP Subscriptions

80.4

80.7

80.5

80.9

Non-GAAP Other

(10.6

(3.4

(14.7

(0.4

Non-GAAP Gross profit

77.3

77.2

77.4

Operating expenses reconciliation

GAAP Research and development

77,563

84,901

316,993

329,323

Share-based compensation

(14,515

)

(19,218

)

(63,297

)

(78,862

)

Third-party relocation and other costs, net

(156

)

(3,229

)

(801

)

(5,506

)

Restructuring costs

(121

)

(386

)

(4,793

)

(3,215

)

Non-GAAP Research and development

62,771

62,068

248,102

241,740

As a % of total revenues non-GAAP

9.7

10.1

9.9

10.1

GAAP Sales and marketing

275,906

277,255

1,095,947

1,096,448

Share-based compensation

(26,882

)

(33,322

)

(116,030

)

(137,350

)

Amortization of acquired intangibles

(2,747

)

(2,055

)

(9,225

)

(5,853

)

Asset write-down charges

—

(11,440

)

—

Third-party relocation and other costs, net

(949

)

—

(1,601

)

(332

)

Restructuring costs

(1,075

)

(1,246

)

(5,662

)

(5,885

)

Non-GAAP Sales and marketing

244,253

240,632

951,989

947,028

As a % of total revenues non-GAAP

37.9

39.2

37.9

39.5

GAAP General and administrative

64,616

58,545

258,418

266,447

Share-based compensation

(19,015

)

(21,624

)

(76,985

)

(98,998

)

Third-party relocation and other costs, net

(908

)

4,860

(2,354

)

169

Restructuring costs

(496

)

(363

)

(3,483

)

(2,201

)

Non-GAAP General and administrative

44,197

41,418

175,596

165,417

As a % of total revenues non-GAAP

6.9

6.7

7.0

6.9

Income (loss) from operations reconciliation

GAAP income from operations

42,441

15,637

120,551

2,670

Share-based compensation

64,414

81,579

275,637

346,648

Amortization of acquired intangibles

34,144

33,448

135,420

136,539

Asset write-down charges

—

11,440

—

Third-party relocation and other costs

2,017

(1,502

)

4,768

5,847

Restructuring costs

3,662

2,009

18,117

12,635

Non-GAAP Income from operations

146,678

131,171

565,933

504,339

Non-GAAP Operating margin

22.8

21.3

22.5

21.0

Adjusted EBITDA reconciliation

Depreciation and amortization

22,057

21,604

87,183

86,070

Non-GAAP Adjusted EBITDA

168,735

152,775

653,116

590,409

As a % of total revenues non-GAAP

26.2

24.9

26.0

24.6

TABLE 5

RINGCENTRAL, INC.

RECONCILIATION OF NET INCOME (LOSS)

GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except per share data) (Unaudited)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2025

2024

2025

2024

Net income (loss) income reconciliation

GAAP net (loss) income

22,967

(7,188

)

43,391

(58,288

)

Share-based compensation

64,414

81,579

275,637

346,648

Amortization of acquired intangibles

34,144

33,448

135,420

136,539

Asset write-down charges

—

11,440

—

Third-party relocation and other costs, net

3,002

(2,332

)

7,029

(1,403

)

Restructuring costs

3,662

2,009

18,117

12,635

Amortization of debt discount and extinguishment costs

1,074

1,160

9,615

4,272

Income tax expense effects

(25,271

)

(17,649

)

(102,691

)

(90,517

)

Non-GAAP net income

103,992

91,027

397,958

349,886

Reconciliation between GAAP and non-GAAP weighted average shares used in computing basic and diluted net income (loss) per common share:

Weighted average number of shares used in computing basic net income (loss) per share

86,106

90,678

89,481

92,110

Effect of dilutive securities

1,853

—

1,733

—

GAAP weighted average shares used in computing GAAP diluted net income (loss) per share

87,959

90,678

91,214

92,110

Effect of dilutive securities

—

2,567

—

2,373

Non-GAAP weighted average shares used in computing non-GAAP diluted net income per share

87,959

93,245

91,214

94,483

Diluted net (loss) income per share

GAAP net income (loss) per share

0.26

(0.08

)

0.48

(0.63

)

Non-GAAP net income per share

1.18

0.98

4.36

3.70

TABLE 6

RINGCENTRAL, INC.

RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES

GAAP MEASURES TO NON-GAAP FREE CASH FLOW MEASURES

(Unaudited, in thousands)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Net cash provided by operating activities

148,989

132,882

617,427

483,276

Capitalized expenditures

(22,859

)

(21,053

)

(87,214

)

(80,528

)

Non-GAAP free cash flow

126,130

111,829

530,213

402,748

Non-GAAP free cash flow margin

19.6

18.2

21.1

16.8

TABLE 7

RINGCENTRAL, INC.

RECONCILIATION OF FORECASTED OPERATING MARGIN AND FREE CASH FLOW

GAAP MEASURES TO NON-GAAP MEASURES

(Unaudited, in millions)

Q1 2026

FY 2026

Low Range

High Range

Low Range

High Range

GAAP income from operations

224

254

GAAP operating margin

7.1

8.2

8.6

9.6

Share-based compensation

250

240

Amortization of acquired intangibles, restructuring and other costs

126

Non-GAAP income from operations

146

148

600

620

Non-GAAP operating margin

22.8

22.9

23.0

23.5

FY 2026

Low Range

High Range

GAAP net cash provided by operating activities

675

690

Capitalized expenditures

(95

)

(90

)

Non-GAAP free cash flow

580

600